How to make money with Bitcoin

This article and video will show you how to make money with Bitcoin without ever leaving your desk. Each way to make money with Bitcoin has a different risk threshold with which comes its own reward.

Start a Bitcoin Faucet

The first and lowest risk way to make money with Bitcoin is starting your own Bitcoin faucet. Bitcoin Faucets are websites which give out bitcoins in exchange for time spent on the website. The business model behind bitcoin faucets is simple, monetize the traffic via ads on the site. When you sign up to the site with either your bitcoin address or your email or both, you are presented with a captcha to fill in order to receive a small amount of bitcoins

There is a free and open source solution to those wanting to start their own Faucet called FaucetBox. Using this tutorial you can setup FaucetBox on your VPS in minutes. Once you have the faucet running you must decide how to monetize your traffic either via google adsense or possibly using Bitcoin friendly ad networks like bitmedia or coinad.

Arbitrage between different exchanges

This one is a bit higher risk than starting your own Bitcoin faucet but the reward increases exponentially. Arbitraging between Bitcoin exchanges works the same way arbitraging works in any other markets. Popular exchanges to arbitrage between are BTC-E, Bitfinex, Bitstamp, and Coinbase. There is usually a spread of a few dollars in either two of those exchanges so buying Bitcoins from one exchange and selling it on another can earn you a few percent on your holdings.

The risky part comes in the form of Bitcoin market volatility. Because buying Bitcoins from exchanges takes a few days if the market moves significantly one way then you can potentially loose any margin from the arbitrage. Some exchanges like Coinbase and Circle offer instant buy up to a certain amount so using that feature can reduce your risk threshold for arbitraging, but with the low limits you can only make so much.

Lend Bitcoins for profit

Yet another way to make money with Bitcoin, this one about as risky as arbitraging is lending your Bitcoins using p2p lending services like BTCJam or Bitbond. As an investor you are expected to earn anywhere from 10-14% back on your investment per year depending on the type of investment strategy you use. Furthermore, you can visit the Lending section in Bitcointalk and lend Bitcoins for some sort of collateral, sometimes the collateral can be Altcoins which you can turn into profit.

While companies do all in their power to verify user’s credit history there will always be those that slip through the cracks. There is a risk of fraud as a user can sign up to a lending website using fake or stolen credentials, while the risk of that happening is low it still must be taken into account.

Sell Bitcoins on Localbitcoins

Another moderately risky way to make money with Bitcoin is selling them on Localbitcoins. There is a robust market on Localbitcoins for buying and selling bitcoins. You may be surprised to find out that Localbitcoins isn’t only good for finding buyers and sellers locally but it’s good for converting Bitcoin to other payment methods. Customers are willing to pay high premiums of up to 15% to be able to buy your Bitcoins using alternative payment options such as PayPal, Amazon Gift Card, Venmo, Netspend, etc. It goes without saying that accepting PayPal or Amazon Gift Card presents a huge risk for a chargeback or gift card deactivation due to potential fraud.

Cloud Mining Altcoins

This is the highest risk way to make money with Bitcoin. Using your Bitcoins you can rent hashpower on sites like Miningrentals or Nicehash. You can rent rigs running all sorts of hashing algorithms suited for all types of Altcoins. You can use a website like Coinwarz to determine which coins are profitable to mine, but if you are a real risk taker another way of profiting off of cloud mining is mining newly launched coins. If you visit the Altcoins Announcement section on Bitcointalk you can find daily announcements of new altcoins launched every day. A word of advice is don’t get too exited as a very small percentage of the coins released actually succeed and hold their value, also be aware of malware being distributed as wallet software when downloading any files from the forum.

Renting cloud mining rigs can be a fun and profitable activity if you do your research before choosing to invest into any altcoin. However, don’t make the mistake of renting cloud mining rigs which promise daily payouts on an arbitrary formula as those are 99.9% ponzi schemes. Only rent mining rigs which you have control over, rigs rented on Miningrigrentals allow the use of custom mining pool and the selection of each rig’s hashpower and duration.

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About The Author

Mark is a 22 year old cryptocurrency entrepreneur. He was introduced to Bitcoin in 2013 and has been invovled with it ever since. He used to mine bitcoins and altcoins but now focuses on blogging and educating others about digital currencies.

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